This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Emiten konstruksi 2024: Tahun pertaruhan BUMN Karya
26 January 2024
By Dionisio Damara Tonce and Ibad Durrohman
Construction state-owned enterprise (SOE) issuers are securing more new contracts, capitalising on the upsurge in the infrastructure budget towards the end of the term of President Joko Widodo-Vice President Ma’ruf Amin.
Construction SOE issuers are expected to face fewer challenges this year compared to the previous year. The administration of President Joko Widodo and Vice President Ma’ruf Amin is boosting the infrastructure budget by 5.8% for 2024 in comparison to the preceding year.
The Finance Ministry highlighted that the infrastructure sector has been allocated Rp422.7 trillion from the 2024 State Budget (APBN). The amount is higher by 5.8% compared to the allocation from the 2023 APBN, which stood at Rp399.6 trillion. Notably, this budget allocation for infrastructure is the highest in the decade during the administration of Joko Widodo (Jokowi).
The high infrastructure budget this year is a blessing for construction SOE issuers, such as PT Adhi Karya (Persero) Tbk, PT Wijaya Karya (Persero) Tbk, and PT Pembangunan Perumahan (Persero) Tbk. This year, the three construction SOE issuers are setting a moderate target for new contracts.
This year, PT Adhi Karya (Persero) Tbk (ADHI) is targeting their new contracts to grow around 5%-10% compared to the realisation in the previous year. In 2023, ADHI secured new contracts worth Rp37.4 trillion, which increased by 57.80% from Rp23.7 trillion in 2022.
Adhi Karya President Director Entus Asnasi Mukhson said that the 2024 elections reduced the number of new contracts. Fortunately, the increase in the 2024 State Budget Draft (RAPBN) is a breath of fresh air.
“We are targeting a growth of around 5%-10% with large projects as the main composition, including projects from toll road business entities (BUJTs) or for water processing,” he said during Public Expose Live 2023 recently.
Entus explained that their new contract realisation has surpassed the set target and yielded benefits. The company at least has sufficient carry-over contracts for 2024-2025. The company is also targeting several projects in Nusantara Capital City (IKN) in East Kalimantan that will be tendered this year.
He hopes that the projects in IKN can contribute to the company’s performance, especially in the face of global challenges such as the rising interest rates of central banks worldwide.
Adhi Karya Corporate Secretary Farid Budiyanto added that ADHI’s new contract realisation in 2023 was dominated by the engineering and construction business line, constituting 93% of the total. Meanwhile, the manufacturing business contributed 3%, while the rest were contributed from the property, hotel, and investment business lines.
Throughout last year, ADHI’s funding profile consisted of 43.6% from SOEs and regional state-owned enterprises (BUMDs), 3.5% from the government, 13.8% from loans, and 9.1% from the private sector.
Farid additionally mentioned that ADHI's most significant new contract in 2023 originated from railway infrastructure projects in the Philippines, specifically South Commuter Railway CP S-03C and Malolos-Clark Railway Project CP S-01. ADHI's share in this contract amounted to Rp3.9 trillion.
Some of their other significant projects are the South Jakarta-Cikampek toll road worth Rp2.1 trillion, the PUSRI IIIB factory project worth Rp1.4 trillion, as well as facilities and infrastructure projects in IKN.
Another construction SOE issuer, PT Pembangunan Perumahan (Persero) Tbk (PTPP), is also targeting their new contracts to increase by 5% in 2024.
Throughout last year, PTPP secured new contracts worth Rp31.67 trillion, which slightly grew from Rp31.19 trillion in 2022.
PTPP President Director Novel Arsyad said that the company was targeting projects in the infrastructure and buildings sector, which are mostly funded by the APBN and SOEs.
“Regarding the realisation of new contracts in 2024, PTPP is targeting an increase of around 5% from the previous year,” he said at a dissemination recently.
PTPP Corporate Secretary Bakhtiyar Efendi further mentioned that in 2023, the new contracts secured by PTPP were primarily projects funded by the government, making up 42.79% of the total. Meanwhile, Projects funded by the private sector constituted 37.20%, while those backed by State-Owned Enterprises (SOEs) accounted for 20.1%.
Based on the type of work, PTPP’s most substantial new contract realisation comes from the road and bridge sector, making up 34.64% of the total. Then, it is followed up by contributions from the building sector at 31.71%, the railway sector at 11.22%, and the airport sector at 7.21%. The rest of the new contract realisation is contributed by port, dam, industrial, irrigation, power plant, and natural oil and gas projects.
Bakhtiyar mentioned that PTPP’s contract value growth in 2023 showed the company’s trustworthiness in undertaking projects both nationally and internationally. It also shows that they are consistent in strengthening their core business in construction.
“PTPP is highly committed to contributing to infrastructure development, especially to national strategic projects (PSNs) that are currently expedited by the government. Until now, PTPP has worked on 30 PSNs” with 12 of them completed,” Bakhtiyar said in his official statement.
